Special Study on the U.S. Agricultural Act of 2002

Author: Zhang Hanlin
Publisher:
Publish Date: 2005-05-01
Features: This study, through cross-departmental model calculations, compares two alternative policies—2002 Agricultural Act and 1996 Agricultural Act—elaborating on the impact of the 2002 Agricultural Act on agricultural product markets. In terms of methodology, the U.S. Department of Agriculture's Economic Research Service's Food and Agricultural Policy Model (FAPM) is utilized, supplemented by analyses from the Department's Cross-Departmental Product Committee for certain products. The model examines the situation 10 years after the implementation of the new agricultural law and considers the USDA's legislative intentions for the new law, including enhancing the competitiveness of agricultural products in the global market and strengthening exports, which result in continuously rising market prices over the next decade. This study does not predict the impacts of counter-cyclical subsidies, direct payments, and adjustments to base acres or payment per yield, as there are currently no effective methods to quantify the analysis of these scenarios. However, compared to price and production-linked programs such as marketing loans, the impacts of the aforementioned measures may be relatively minor. The exact extent of their influence remains uncertain and requires further research in the future.